By: Nemesis Escalante – Associate in Honduras
The main goal in every Company is to achieve a market recognition of their Brand, in order to maintain a commercial identity and be differentiated from its main competitors.
When creating a company, one of the most important steps is the naming process, and it is crucial to create a commercial name that will provide them with this identity in the competitive market. The commercial name is the asset that allows a business to gain prestige and reputation over the products or services it offers.
Most of the times we tend to confuse the “commercial name” with the “brand or trademark”. The Intellectual Property Law establishes, in its Article 79, that:
“A brand/trademark is any visible sign that allows the differentiation of a product or service of a company from products/services of other companies”.
And that commercial name is the name, denomination, abbreviation or designation that identifies and differentiates a company or business in its commercial activity.”
But not to worry, it is quite common to confuse both terms, however, it is very important to identify their differences, especially when managing a company. Both, commercial name and trademark are regulated under the Industrial Property Law and the Paris Agreement.
A company's commercial name and its exclusive use right will only be granted if it is properly registered in the Intellectual Property registration office.
Established restrictions for Commercial Names:
A commercial name cannot be formed by a designation or sign that affects or contradicts the common morality, or that could deceive or create confusion in the commercial means or among their target, in relation to the company's nature, commercial activity, or any other aspect related to its establishment or products.
· A distinctive sign that is widely-known in the country of origin cannot be used as a commercial name.
· The commercial name of an extinguished company cannot be used until 1 year later of the extinction date.
Benefits of registering a Commercial Name:
· Registering a commercial name generates gains and added value to a company, for it grants its title holder a transfer right.
· A commercial name forbids that any third party benefits or takes advantage of the reputation and prestige of the company.
· It allows the company's consumer target to associate the exclusive name to the products or services it offers, granting it a unique value.
· The products or services offered by a company will be protected under the corresponding authority, allowing the extension or amplification of its protection in many countries in case they need to be commercialized abroad.
Disadvantages of not registering a Commercial Name:
· The company remains unprotected by the corresponding authority and has now possession nor exclusivity over its denomination.
· There is no way to respond or react towards third parties using the name for its reputation and prestige without an authorization.
· The company holds no competitive image in the market.
· Unfair competitors may use similar names that cause confusion on customers.
In conclusion, for any company competing commercially in any market, it is very important to go under the registration process for its commercial name in order to add value to its products. We must remember, this is the nomination under which we are going to be identified by all of our customers and target market. This is the denomination by which we are going to face our competitors and establish a prestige for ourselves. Let's keep creating and protecting our Intellectual Property assets.
For more information contact us at: honduras@latinalliance.co or contact the author of this article, Nemesis Escalante: nescalante@latinalliance.co